To our valued customers: 

We hope that this communication finds you and your family safe and healthy during this global COVID-19 pandemic. Our thoughts go out to anyone and their families who have been affected by this terrible virus. 

It has been 8 weeks now since federal and provincial governments imposed necessary and mandatory restrictions related to essential/non-essential businesses, social distancing and stay at home protocols. The inherent outcome of observing these guidelines has resulted in market slowdowns and an unprecedented impact on our businesses in an effort to keep us all safe. 

These impacts have led to much volatility and uncertainty in the global price of steel. While markets have been in turmoil, domestic mills have been implementing price increases throughout Q1 and are announcing further increases in Q2. 

Steel market interruptions during COVID-19: 

• Governments introduce restrictions on non-essential construction activity leading to contractor, dealer and manufacturer shutdowns in many parts of the country 
• The automotive industry suspends manufacturing, leading to shutdown of service centres and other automotive supporting businesses, contributing to low utilization 
• North American capacity utilization hits an all-time unsustainable low of 51% 

Factors supporting upward price pressure: 

• Canadian Border Services Association (CBSA) announces duties on steel imported from Turkey, Vietnam and UAE 
• Domestic mills begin removing capacity in an effort to avoid over production 
• Stelco announced a Q3 shutdown of their Lake Erie Works suspending iron/steelmaking capabilities for 3 months 
• Scrap steel prices increase globally 
• The automotive industry announces reopening, resulting in a projected increase in demand 
• North American mills such as ArcelorMittal Dofasco, Stelco, Algoma, CSI, US Steel, Nucor have all announced immediate price increases. We expect this upward pressure will to continue. 

Bailey has been committed to doing our part as we work through this pandemic, with our partners, in protection of markets and our industry. As a result, we have absorbed all Q1 raw material cost increases from domestic mills by deferring our previously announced April 1, 2020 price increase. However, due to the recent upward cost pressure we are now forced to pass on these increases on to the market. 

Please be advised that Bailey will implement a price increase on all steel products by a minimum of 10% in all regions effective July 1, 2020. 

We are committed to an uninterrupted supply of quality, code compliant products to meet your needs. Feel free to contact your local Bailey representative with any questions or concerns. 

Sincerely, 
Bailey Metal Products Ltd. 
Derick Vinthers – Vice President, Sales